Bean Option Recap From Jon Karmin

Posted on Monday, January 5th, 2015 at 1:52 pm.

Beans rocketed higher after traders covered their shorts initiated after last week’s very weak performance. As far as I can tell the only bullish news is that traders are overwhelmingly bearish and the market will not reward a crowded trade. There is some re-balancing of index positions but not justifying the buying for this kind of move. Weather in South America is decent with the prospect of increasing world carry out significantly. Without a bullish surprise in next week’s report it is hard to find a reason to support this price level but until we flush out more of these shorts it will be very difficult to move anywhere lower. The path of least resistance is most certainly higher so it possible that we could test last month’s highs before the report. We traded and settle through both the 500 and 100 day MA last week and blew back through those in today’s rally. My only suggestion going forward is to play the extremes. When we reach levels which seem so compelling only then initiate the trade. Everything else in between is just noise. SG vol 24.25 up .75, SH vol 23.5 up .75, SK vol 22.75 up .75, SN vol 22.75 up .75, SX vol 21 up .75